Wednesday, March 26, 2014

Rwanda holds rate to sustain credit to private sector

Rwanda's central bank maintained its accommodative policy stance by maintaining the repo rate at 7.0 percent "to sustain current positive trend in credit to the private sector thus supporting the expected economic growth recovery."
The National Bank of Rwanda (BNR), which last cut its rate by 50 basis points in June 2013, said the expansion of credit is not expected to jeopardize price stability in the near term but added that it would closely monitor all underlying inflation factors so it could take timely and appropriate responses.
Rwanda's inflation rate accelerated to 3.45 percent in February from 2.43 percent in January and the BNR said the financial sector was performing well and stable due to adequate capitalization.
Growth in Rwanda's economy was moderate in 2013 due to the lagged impact of mid-2012 cuts in donor support that was reflected in reduced government spending.
"Nevertheless, the economic performance is expected to progressively recovery, increasing to around 6.0% in real terms in 2014, on account of improved aggregate demand," the bank said.